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Abstract

In recent years, pay-for-performance (P4P) programs have been developed as a strategy for driving improvements in the quality and cost-efficiency of health care. The Centers for Medicare & Medicaid Services (CMS), is actively considering P4P for Medicare physician services, viewing this policy strategy as one way to increase physician responsibility for efficiently providing high quality care to beneficiaries of the Medicare program. With an interest in learning more about P4P programs targeted at physicians, the Assistant Secretary for Planning and Evaluation (ASPE), within the U.S. Department of Health and Human Services, contracted with the RAND Corporation to help in its assessment of whether P4P can be effectively implemented in the Medicare physician service delivery and payment environment. This report presents the results of this study, including a review what is known about P4P and the empirical evidence about its effectiveness, a description of the characteristics of current P4P programs, lessons learned from currently operating P4P programs about how to design and implement these programs, key P4P program design components and an assessment of the options for each component, a framework for guiding the development of a P4P program, the challenges CMS can expect to face in designing and implementing a P4P program for Medicare physician services, as well as steps that CMS could take to prepare for building and supporting a national P4P program for physician services.

Table of Contents

Chapter One

Background and Context

Chapter Two

A Review of the Evidence on Pay-For-Performance Methods

Chapter Three

A Review of Existing Pay-For-Performance Programs Methods

Chapter Four

Structuring a Pay-For-Performance Program for Medicare Physician Services: Design Issues and Options

Appendix A

Pay-For-Performance Design Principles and Recommendations Set Forth by National Organizations

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The research in this report was conducted by RAND Health and prepared for the Assistant Secretary for Planning and Evaluation, US Department of Health and Human Services.

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